Inpolitical philosophy, themeans of production refers to the generally necessaryassets andresources that enable a society to engage inproduction.[1] While the exact resources encompassed in the term may vary, it is widely agreed to include the classicalfactors of production (land,labour, andcapital) as well as the generalinfrastructure andcapital goods necessary to reproduce stable levels ofproductivity.[2] It can also be used as an abbreviation of the "means of production and distribution" which additionally includes thelogistical distribution and delivery of products, generally throughdistributors; or as an abbreviation of the "means of production, distribution, and exchange" which further includes the exchange of distributed products, generally toconsumers.[3]
The concept of "Means of Production" is used by researchers in various fields of study — includingpolitics,economics, andsociology — to discuss, broadly, the relationship between anything that can have productive use, itsownership, and the constituent social parts needed to produce it.
From the perspective of a firm, afirm uses its capital goods,[4] which are also known as tangible assets as they are physical in nature. Unfinished goods are transformed into products and services in the production process. Even if capital goods are not traded on the market as consumer goods, they can be valued as long as capital goods are produced commodities, which are required for production. The total values of capital goods constitute the capital value.[5][6]
The social means of production are capital goods and assets that require organized collective labor effort, as opposed to individual effort, to operate on.[7] The ownership and organization of the social means of production is a key factor in categorizing and defining different types ofeconomic systems.
The means of production includes two broad categories of objects:instruments of labor (tools,factories,infrastructure, etc.) andsubjects of labor (natural resources andraw materials). People operate on the subjects of labor using the instruments of labor to create a product; or stated another way, labor acting on the means of production creates a good.[8] In anagrarian society the principal means of production is the soil and the shovel. In anindustrial society the means of production become social means of production and include factories and mines.
In aknowledge economy, learning, research, development, innovation, ideas and creativity are the means of [knowledge] production; communication such as books, articles, videos disseminated both physically and digitally over the Internet are a means of [knowledge] distribution. In a broad sense, the "means of production" also includes the "means ofdistribution" such as stores, the internet and railroads (Infrastructural capital).[9]
The means of production of the firm may depreciate, which means there is a loss in the economic value of capital goods or tangible assets (e.g. machinery, factory equipment) due to wear and tear, and aging. This is known as thedepreciation of capital goods.[10]
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The analysis of the technological sophistication of the means of production and how they are owned is a central component in theMarxist theoretical framework of historical materialism and inMarx's critique of political economy, and later inMarxian economics.
In Marx's work and subsequent developments in Marxist theory, the process ofsocioeconomic evolution is based on the premise oftechnological improvements in the means of production. As the level of technology improves with respect to productive capabilities, existing forms ofsocial relations become superfluous and unnecessary as the advancement of technology integrated within the means of production contradicts the establishedorganization of society and itseconomy.
The increasing efficiency of the means of production via the creation and adaptation of new technologies over time has a tendency to rearrange local and global market structures, leading to the disruption of existing profit pools, creating the possibility of massive economic impact.Disruptive technologies can lead to the devaluation of various forms of labor power, up to the point of making human labor power economically noncompetitive in certain applications, potentially widening income inequality.[11]
According to Marx, escalating tension between the upper and lower class is a major consequence of technology decreasing the value of labor force and the contradictory effect an evolving means of production has on established social and economic systems. Marx believed increasing inequality between the upper and lower classes acts as a major catalyst ofclass conflicts, which develop to a point where the existing mode of production inevitably becomes unsustainable, either collapsing or being overthrown in asocial revolution, at which point the contradictory relationship between technological advancement and the value of labor force is resolved by the emergence of a new mode of production based on a different set ofsocial relations including, most notably, different patterns of ownership for the means of production.[12]
Ownership of the means of production and control over thesurplus product generated by their operation is the fundamental factor in delineating differentmodes of production. Capitalism is defined as private ownership and control over the means of production, where the surplus product becomes a source ofunearned income for its owners. Under this system, profit-seeking individuals or organizations undertake a majority of economic activities. However, capitalism does not indicate all material means of production are privately owned as partial economies are publicly owned.[13]
Marx's theory of class defines classes in their relation to their ownership and control of the means of production. In a capitalist society, thebourgeoisie, or the capitalist class, is the class that owns the means of production and derives apassive income from their operation. Examples of the capitalist class include business owners, shareholders and the minority of people who own factories, machinery and lands. Countries considered as the capitalist countries include Australia, Canada, the U.S., and other nations which hold a free market economy. In modern society, small business owners, minority shareholders and other smaller capitalists are considered asPetite bourgeoisie according to Marx's theory, which is distinct from bourgeoisie and proletariat as they can buy the labour of others but also work along with employees.
In contrast, theproletariat, orworking class, comprises the majority of the population that lacks access to the means of production and are therefore induced to sell theirlabour power for a wage or salary to gain access to necessities, goods and services.[14]
According to Marx, wages and salaries are considered as the price oflabour power, related to working hours or outputs produced by the labour force. At the company level, an employee does not control and own the means of production in a capitalist mode of production. Instead, an employee is performing specific duties under a contract of employment, working for wages or salaries.[15] As for firms and profit-seeking organizations, from a personnel economics perspective, to maximize efficiency and productivity there must be an equilibrium between labour markets and product markets. In human resource practices, compensation structure tends to shift towards pay-for-performance bonus or incentive pay rather than base salary to attract the right workers, even if conflicts of interest exist in an employer-worker relationship.[16]
To the question of why classes exist inhuman societies in the first place, Karl Marx offered ahistorical and scientific explanation that it was thecultural practice of ownership of the means of production that gives rise to them. This explanation differs dramatically from other explanations based on "differences in ability" between individuals or on religious or political affiliations giving rise tocastes. This explanation is consistent with the bulk of Marxist theory in which Politics andReligion are seen as mere outgrowths (superstructures) of the basic underlying economic reality of a people.[17]
Factors of production are defined by GermanphilosopherKarl Marx in his bookDas Kapital as labor,subjects of labor, and instruments of labor: the term is equivalent to means of production plus labor. The factors of production are often listed in economic writings derived from theclassical school as "land, labour and capital". Marx sometimes used the term "productive forces" equivalently with "factors of production"; inKapital, he uses "factors of production", in his famous Preface to hisCritique of Political Economy:A Contribution to the Critique of Political Economy, he uses "productive forces" (that may depend on the translation).
Production relations (German:Produktionsverhältnis) are the relations humans enter into with each other in using the means of production to produce. Examples of such relations areemployer/employee, buyer/seller, the technical division of labour in a factory, and property relations.
Mode of production (German:Produktionsweise) means the dominant way in which production is organised in society. For instance, "capitalism" is the name for thecapitalistmode of production in which the means of production areowned privately by a smallclass (thebourgeoisie) who profits off the labor of theworking class (theproletariat).Communism is a mode of production in which the means of production are not owned by anyone, butshared in common, without class-basedexploitation. Besides capitalism and communism, there is another mode of production which is called a Mixed Economic System. In a mixed economy, private ownership of capital goods are protected and a certain level of the market economy is allowed. However, the government has the right to intervene in the market and economic activities for social objectives. Different from the pure capitalism, the government regulation exists to control particular means of production over the private business sector. Different from communism, the majority of means of production are privately owned rather than shared in common.[18]
[...] Hindess and Hirst (1977, page 65) [...] define means of production as 'all the conditions necessary to the operation of a particular labour process which are combined in theunits of production in which that process takes place' [...].
It takes the means of production to comprise anything that is or can be put to productive use... the means of production consist of anything that enables or could enable the extraction of surplus value (exploitation). Similarly, for Proudhon, goods not meant for immediate consumption, whose accumulation might introduce social inequality
The conception of capital within orthodox economics. Within orthodox economics, the term 'capital' generally refers to the means of production.
Here we encounter a further characteristic of the modern wage proletarian. He works not with the individual but with social means of production, means of production so extensive that they can be operated only by a society of workers, not by the individual worker.
{{cite book}}: CS1 maint: location missing publisher (link){{cite book}}: CS1 maint: location missing publisher (link)For Marx, class was defined by an individual's relationship to the means of production...Class is determined by the extent to which people own most, some, or little of the means of production, or by their relationship to the means of production. It generally conflicts over control or access to the means of production that drives history.
{{cite book}}: CS1 maint: multiple names: authors list (link){{cite book}}: CS1 maint: location missing publisher (link)Nolan P. K Lenski 2009
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